• The UK Energy Market & ‘Green’ Tarrifs

    Adapted from a report commissioned by GCC by Danny Chivers, author of NoNonsense Renewable Energy: Cleaner, fairer ways to power the planet. 


    Does using a green supplier make my energy zero carbon? The short answer, unfortunately, is no. Unless you have your own renewable generation (e.g. solar panels) that connect directly into your building, then your electricity comes from the same national grid as everybody else. All tariffs burn fossil fuels at the same rate.


    Whatever company you buy from, the most important thing to be aware of is that the electricity you use still has the same carbon footprint, currently 0.26 kg CO2e per kWh. If you are on a green tariff and you turn your kettle on, some renewable electricity will be taken (on paper) from the electricity account of someone on a standard tariff and transferred to yours.


    Then a gas-fired power station will be turned up in order to replace it. In other words, turning your kettle on causes a gas-fired power station to be turned up to supply it, just the same amount as when anyone else does it.


    The electricity system is ultimately a shared thing. Most of the decisions about it are being made at the governmental level, and the cost of decarbonising it is being shared between eve-ryone in the country.


    So while it is good to buy from one of the companies that is making more of an effort to help, the key things are to keep minimising your energy use, and to keep pushing for political action.


    In the GCC carbon calculator, we are trying to follow best practice, and so we calculate everyone’s electricity footprint based on their local supply. Although it may seem unfair to pay for a green tariff and then not be able to count it against your carbon footprint, here are some good reasons for this guidance, and some benefits too.


    The following list is based on research by Ethical Consumer – check out their recent guide to ethical energy suppliers for more details on all of these companies, and their assessment of the non-renewable suppliers too. (If you’re outside the UK, please let us know of any similar references for energy companies in other countries and we’ll share them here).


    Ecotricity is actively building new renewable capacity in the UK. 20% of the electricity it supplies to customers comes from its own wind turbines and solar panels, the rest comes from direct power purchasing agreements (PPAs) with other renewable generators. This gives those generators extra financial stability. 


    Green Energy UK and Good Energy don’t generate anything themselves, but they buy all their electricity through PPAs from renewable generators, directly supporting the renewables industry and community renewable projects.


    Octopus Energy only gets 10% of its electricity through PPAs with renewable generators – the remaining 90% is just REGO certificates. Octopus Energy is part- owned by an Australian company called Origin Energy which owns a large number of fossil fuelled power stations.  Co-op Energy gets its electricity from Octopus Energy, so the same applies to their tariffs too.


    Ripple has a different – and interesting – model. Rather than signing a standard supply contract, they ask customers to directly invest in a new renewable generator (e.g. a wind turbine), as part of an energy co-operative. The more you invest, the larger your “share” in the turbine will be, and the bigger the discount on your bills. Any extra electricity you need (if you didn’t invest enough to cover all your bills from the wind turbine) will be supplied by Co-op Energy, who get it from Octopus (see above).


    Bulb and Ovo Energy get part of their supply through PPAs, but most of their renewable tariff is based on REGO certificates. Ovo also supplies SSE Energy.


    Together Energy don’t own any renewable capacity or have any purchasing agreements with green generators. Their renewable tariff is based 100% on REGO certificates.


    Shell is a fossil fuel company that buys some REGO certificates.


    Ethical Consumer classifies three of the above companies (Ecotricity, Good Energy, and Green Energy UK) as their “Best Buys” for supporting green energy in the UK. Ripple Energy is categorised as “recommended” – it is certainly helping to build new renewables but gets a slightly lower ranking due to its link to Octopus Energy, who are part-owned by a fossil fuel energy company.


    Some energy companies say they are generating gas from sewage or grass, or offsetting the emissions from their energy by planting trees. Some of these projects may be positive, others are controversial or unlikely to have much impact – see Ethical Consumer for more information on this. None of them are possible to accurately measure or verify in terms of their carbon savings, so we don’t count these kinds of measures in our carbon calculator. 


    Overall, we’d recommend choosing a supplier based on their support for renewable electricity, rather than these harder-to-prove claims.


    Supporting an energy company that is genuinely helping to build new renewables is one way we can help reduce all of our carbon footprints. Increasing the amount of renewables in the electricity grid will bring down the average footprint per KWh, which will feed into our carbon calculator and help all of us to reach our carbon targets.


    Although it may seem unfair to pay for a green tariff and then not be able to count it against your carbon footprint, there are some really positive and important reasons to choose a green energy supplier:

    • If you don’t choose a reputable renewable supplier, you may be helping to subsidise dirty energy. Most big energy companies still make most of their money from fossil fuels, and even those who offer a “green” tariff (such as E-on, British Gas or Shell) don't ringfence your money for renewables so your bills would be helping them ship and sell more coal, oil or gas.
    • Some UK renewable suppliers aren’t directly involved in generating any energy, they just buy the right amount of special renewable energy certificates (called REGOs) to match the amount of electricity you buy from them. This allows them to certify your tariff as “green”, but it has little real impact on the energy markets (see below for more details). However, some renewable companies go the extra mile and actively build new renewable energy generation themselves, or directly support those who do. If you use these suppliers, more of your money is going towards supporting new renewables, which is certainly a good thing.



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